The Laclede Group Reports Fiscal 2013 First Quarter Results

         The Laclede Group Reports Fiscal 2013 First Quarter Results

Earnings Improve Despite Acquisition Costs

PR Newswire

ST. LOUIS, Feb. 5, 2013

ST. LOUIS, Feb. 5, 2013 /PRNewswire/ --The Laclede Group, Inc. (NYSE: LG)
("the Company") today reported improved operating results for its first
quarter of fiscal 2013 ended December 31, 2012. Highlights include:

                                  Three Months Ended December 31
                                  (Millions)             (Per Diluted Share)
                                  2012        2011       2012        2011
Net Income (GAAP)                 $  25.6   $  25.2  $  1.14   $  1.12
   Acquisition costs              2.2         —          0.10        —
   Other Adjustments to GAAP      0.4         (0.3)      0.01        (0.01)
   Earnings
Net Economic Earnings (non-GAAP)* $  28.2   $  24.9  $  1.25   $  1.11
* See "Net Economic Earnings and Reconciliation to GAAP" on page 8.

The Laclede Group reported consolidated net income for its first quarter of
fiscal 2013 of $25.6 million ($1.14 per share), up from $25.2 million ($1.12
per share) for the same period last year. The increased earnings were driven
by higher net income from the Gas Utility segment, reflecting higher
infrastructure surcharges, more favorable weather, and lower costs. The higher
utility earnings were largely offset by costs The Laclede Group incurred in
connection with the pending acquisition of Missouri Gas Energy and New England
Gas Company, as announced on December 17, 2012. Earnings were also impacted by
lower earnings from the Gas Marketing segment.

Net economic earnings (non-GAAP) for the first quarter were $28.2 million
($1.25 per share), up 13 percent from $24.9 million ($1.11 per share) for the
same period last year. Net economic earnings exclude from net income the
acquisition-related costs and the effect of unrealized gains and losses on
energy-related derivatives. 

"Over the last several months, we have achieved several successes in the
pursuit of our operational and strategic priorities. We have made excellent
progress toward the completion of our acquisition including filing for and
receiving certain approvals and working on permanent financing for the
transaction. We also recently announced plans to invest in emerging technology
through Spire, our platform for developing natural gas fueling solutions,"
said Suzanne Sitherwood, president and chief executive officer of The Laclede
Group. "At the same time, we continued to serve our customers well, staying
focused on growth and delivering improved overall operating performance for
the quarter," she added.

ACQUISITION UPDATE

As announced on December 17, 2012, Company subsidiaries entered into
agreements to acquire substantially all the assets and liabilities of Missouri
Gas Energy and New England Gas Company from Southern Union Company. The $1.035
billion transaction, which is subject to customary closing adjustments and
receipt of applicable federal and state regulatory approvals, is expected to
close before the Company's fiscal year ends on September 30, 2013. The Laclede
Group has requested, and received, antitrust clearance under the
Hart-Scott-Rodino Act. The Company and Laclede Gas jointly filed with the
Missouri Public Service Commission (MoPSC) on January 14, 2013 for approval of
the MGE acquisition. A similar filing with the Massachusetts Department of
Public Utilities was made on January 24, 2013, for approval of the acquisition
of New England Gas Company.

The closing of the transaction is supported by a $1.02 billion bridge
facility, which has been syndicated by Wells Fargo Securities, LLC to nine
financial institutions including Wells Fargo Bank, N.A. This syndicate will
also assist the Company with securing permanent debt and equity financing.

During the first quarter of fiscal 2013, The Laclede Group incurred due
diligence and other acquisition-related costs totaling $2.2 million net of
income tax. These costs, which were reported in the Other segment, reduced
consolidated net income by $0.10 per share for the quarter.

GAS UTILITY SEGMENT

The Gas Utility segment, which includes the regulated gas distribution
operations of Laclede Gas, reported net income of $25.3 million for the
quarter ended December 31, 2012, an increase of 20 percent compared to $21.1
million for the same period last year. The improvement was primarily due to
increased Infrastructure System Replacement Surcharge (ISRS) revenues, higher
sales margins reflecting colder temperatures this fall, and lower bad debt
expenses. The higher ISRS revenues are a result of increased investment in
distribution pipeline replacement to enhance safety and reliability for
Laclede Gas customers.

As previously announced, Laclede Gas filed a general rate case with the MoPSC
on December 21, 2012, seeking a $48.4 million net increase in annual revenues,
the utility's first such rate filing in three years. The MoPSC is expected to
render a decision within 11 months of the filing date. Also during the fiscal
first quarter, Laclede Gas filed a request with the MoPSC to reduce gas cost
revenues by $44 million annually under its Purchased Gas Adjustment (PGA)
Clause, which went into effect November 16, the beginning of the heating
season. On January 11, 2013, Laclede Gas filed with the MoPSC for a $5.6
million increase in ISRS revenues to recover its investments in replacement of
distribution pipelines over the previous eight months, which is pending
approval.

GAS MARKETING SEGMENT

The Gas Marketing segment, which includes Laclede Energy Resources, reported
lower operating revenues for the quarter ended December 31, 2012 of $55.2
million, down from $158.6 million in the prior year period. Operating expenses
were also down significantly – to $57.4 million from $152.6 million. These
decreases largely reflect a higher percentage of transactions being reported
as trading activities, which are recorded on a net rather than a gross basis.
While this presentation reduces operating revenues, it has no direct impact on
earnings. Net income was $2.9 million, down from $3.7 million for the same
period last year, while net economic earnings (non-GAAP) were $3.3 million,
comparable to $3.4 million for the same period a year ago. On a GAAP basis,
the reduction in net income was largely attributable to higher net unrealized
losses on energy-related derivatives.

CASH FLOWS AND CAPITAL STRUCTURE

Net cash provided by operating activities was $3.9 million for the three
months ended December 31, 2012, compared with net cash used in operating
activities of $50.1 million for the same period last year. The variation is
primarily associated with the timing of collections of gas cost under the PGA
Clause, as well as decreased cash payments for the funding of pension plans.
Excluding temporary changes in working capital, such as the effect of
regulatory timing differences in the recovery of certain costs and the timing
of cash payments for income taxes, operating cash flows (non-GAAP) for the
first quarter of fiscal 2013 were $37.5 million, which was comparable to $35.2
million for the first quarter of fiscal 2012. See reconciliation of Operating
Cash Flows (non-GAAP) to Net Cash Provided by Operating Activities (GAAP) on
page 9.

Capital expenditures for the three months ended December 31, 2012 increased to
$27.7 million from $18.3 million in the comparable period a year ago. The
increase was driven by significant investments in information technology, as
Laclede Gas continues on its previously announced multi-year upgrade of its
technology platforms, and the accelerated replacement of portions of its
distribution system.

The Laclede Group maintains a strong capital structure, which at December 31,
2012, consisted of 37 percent long-term debt compared to 38 percent at
December 31, 2011 (including the portion that matured on October 15, 2012).
Short-term debt outstanding was $83.1 million at December 31, 2012, down from
$113.0 million at December 31, 2011. As previously disclosed, the Company
entered into certain debt commitments during its fiscal fourth quarter of 2012
to borrow a total of $125 million at rates between 3.0 percent and 3.4 percent
per annum. In December 2012, The Laclede Group issued $25 million of 10-year
unsecured notes at an interest rate of 3.31 percent. Under the commitment, the
remaining $100 million of debt will be issued by Laclede Gas, with funding to
occur in March 2013.

For additional details on The Laclede Group's results for the first quarter of
fiscal 2013, please see the accompanying unaudited Statements of Consolidated
Income, unaudited Condensed Consolidated Balance Sheets, and unaudited
Condensed Consolidated Statements of Cash Flows.

CONFERENCE CALL AND WEBCAST

To access the call, please dial the number below approximately 5-10 minutes
prior to the start time.

 Date and Time: Tuesday, February 5
                                9 a.m. CST (10 a.m. EST)
 Phone Numbers:     U.S.:  1-888-317-6016
                                Canada:      1-855-669-9657
                                International:              1-412-317-6016

The call will also be webcast in a listen-only format for the media and
general public. The webcast can be accessed at www.TheLacledeGroup.com under
the Investor Services tab.

A replay of the call will be available beginning at 11 a.m. CST (Noon EST) on
February 5 and continuing until March 11, 2013, by dialing 1-877-344-7529
(U.S.) or 1-412-317-0088 (Canada/International). The Conference ID is
10023425. The webcast will be available for replay beginning February 5, at
www.TheLacledeGroup.com.

ABOUT THE LACLEDE GROUP

The Laclede Group, Inc. (NYSE: LG), headquartered in St. Louis, Missouri, is a
public utility holding company. Its subsidiary, Laclede Gas Company, the
regulated operations of which are included in the Gas Utility segment, serves
approximately 630,000 residential, commercial and industrial customers in St.
Louis City and parts of 10 counties in eastern Missouri. Laclede's primary
non-utility business, Laclede Energy Resources, Inc., included in the Gas
Marketing segment, provides non-regulated natural gas services. Laclede Group
is committed to pursuing growth through 1) developing and investing in
emerging technologies; 2) investing in infrastructure; 3) acquiring businesses
to which the Company can apply its operating model, and 4) leveraging its
current business unit competencies. For more information about Laclede and its
subsidiaries, visit www.TheLacledeGroup.com.

CAUTIONARY STATEMENTS ON FORWARD-LOOKING INFORMATION AND NON-GAAP MEASURES

This news release contains forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended. The Company's
future operating results may be affected by various uncertainties and risk
factors, many of which are beyond the Company's control, including weather
conditions, economic factors, the competitive environment, governmental and
regulatory policy and action, and risks associated with the Company's pending
acquisition. For a more complete description of these uncertainties and risk
factors, see the Company's Form 10-K for the fiscal year ended September 30,
2012, filed with the Securities and Exchange Commission and the Company's Form
10-Q for the quarter ended December 31, 2012, to be filed later today.

This news release includes the non-GAAP financial measures of "net economic
earnings," and "net economic earnings per share." Management also uses these
non-GAAP measures internally when evaluating the Company's performance. Net
economic earnings exclude from net income the after-tax impacts of fair value
accounting and timing adjustments associated with energy-related transactions.
These adjustments, which primarily impact the Gas Marketing segment, include
net unrealized gains and losses on energy-related derivatives resulting from
the current changes in the fair value of financial and physical transactions
prior to their completion and settlement, lower of cost or market inventory
adjustments, and realized gains and losses on economic hedges prior to the
sale of the physical commodity. In calculating net economic earnings,
management also excludes from net income the after-tax costs related to
acquisition, divestiture, and restructuring activities. Management believes
that excluding these items provides a useful representation of the economic
impact of actual settled transactions and overall results of ongoing
operations. These internal non-GAAP operating metrics should not be considered
as an alternative to, or more meaningful than, GAAP measures such as net
income.

This news release also includes the non-GAAP financial measure of "Operating
Cash Flows." Management also uses this measure internally when evaluating
longer-term cash flow impacts. This measure excludes the effects of temporary
changes in working capital, such as the effect of regulatory timing
differences in the recovery of certain costs and the timing of cash payments
for income taxes. Management believes that excluding these items provides a
useful representation of the economic impact of longer-term cash flows
generated from business activities. This internal non-GAAP cash flow metric
should not be considered as an alternative to, or more meaningful than, GAAP
measures such as net cash provided by operating activities.



STATEMENTS OF CONSOLIDATED INCOME — UNAUDITED
THE LACLEDE GROUP, INC.
(Thousands, Except Per Share Amounts)
                                                      Three Months Ended

                                                      December 31,
                                                      2012         2011
OPERATING REVENUES
      Gas Utility                                     $ 250,111   $ 250,902
      Gas Marketing                                   55,249       158,588
      Other                                           1,643        1,423
       Total Operating Revenues              307,003      410,913
OPERATING EXPENSES
      Gas Utility
       Natural and propane gas                      136,515      146,751
       Other operation expenses                     33,920       37,565
       Maintenance                                  5,731        5,308
       Depreciation and amortization                10,965       10,089
       Taxes, other than income taxes               14,806       14,667
       Total Gas Utility Operating Expenses  201,937      214,380
      Gas Marketing                                   57,382       152,559
      Other                                           5,599        869
       Total Operating Expenses        264,918      367,808
Operating Income                                      42,085       43,105
Other Income and (Income Deductions) - Net            1,084        1,939
Interest Charges:
      Interest on long-term debt                      5,438        5,739
      Other interest charges                          588          575
       Total Interest Charges                 6,026        6,314
Income Before Income Taxes                            37,143       38,730
Income Tax Expense                                    11,575       13,556
Net Income                                            $  25,568   $  25,174
Weighted Average Number of Common Shares
Outstanding:
   Basic                                              22,372       22,193
   Diluted                                            22,434       22,263
Basic Earnings Per Share of Common Stock              $   1.14  $   1.13
Diluted Earnings Per Share of Common Stock            $   1.14  $   1.12





CONDENSED CONSOLIDATED BALANCE SHEETS — UNAUDITED
THE LACLEDE GROUP, INC.
(Thousands)
                                     December 31,  September 30,  December 31,
                                     2012          2012           2011
ASSETS
Utility Plant                        $ 1,508,770   $ 1,497,419    $ 1,400,001
Less: Accumulated depreciation and  470,840       478,120        463,148
amortization
 Net Utility Plant              1,037,930     1,019,299      936,853
Other Property and Investments       57,419        56,814         56,957
Current Assets:
 Cash and cash equivalents          46,563        27,457         44,579
 Accounts receivable (net of
allowance for doubtful               195,784       133,842        197,225

 accounts)
 Inventories                        102,799       106,472        127,487
 Other                              54,917        75,245         46,222
 Total Current Assets       400,063       343,016        415,513
Regulatory assets and other deferred 446,743       461,133        465,007
charges
Total Assets                         $ 1,942,155   $ 1,880,262    $ 1,874,330
CAPITALIZATION AND LIABILITIES
Capitalization:
 Common stock and paid-in capital   $  192,060  $  191,146   $  186,423
 Retained earnings                  430,556       414,581        405,158
 Accumulated other comprehensive    (1,838)       (4,116)        (1,911)
loss
 Total Common Stock Equity      620,778       601,611        589,670
 Long-term debt (less current       364,426       339,416        339,372
portion)
 Total Capitalization           985,204       941,027        929,042
Current Liabilities:
 Notes payable                      83,050        40,100         113,000
 Accounts payable                   100,994       89,503         94,313
 Advance customer billings          15,950        25,146         11,600
 Current portion of long-term debt  —             25,000         25,000
 Accrued liabilities and other      75,076        72,375         79,266
 Total Current Liabilities      275,070       252,124        323,179
Deferred Credits and Other
Liabilities:
 Deferred income taxes              350,738       355,509        335,255
 Pension and postretirement benefit 195,259       196,558        172,791
costs
 Regulatory liabilities             59,836        59,432         55,176
 Asset retirement obligations and   76,048        75,612         58,887
other
 Total Deferred Credits and     681,881       687,111        622,109
Other Liabilities
Total Capitalization and Liabilities $ 1,942,155   $ 1,880,262    $ 1,874,330





CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS — UNAUDITED
THE LACLEDE GROUP, INC.
(Thousands)
                                                        Three Months Ended
                                                        December 31,
                                                        2012        2011
Operating Activities:
 Net Income                                            $  25,568  $  25,174
 Adjustments to reconcile net income to net cash
provided by

 (used in) operating activities:
 Depreciation, amortization, and accretion           11,314      10,239
 Deferred income taxes and investment tax credits    2,572       7,940
 Other – net                                         670         (251)
 Changes in assets and liabilities                   (36,209)    (93,201)
 Net cash provided by (used in) operating      3,915       (50,099)
activities
Investing Activities:
 Capital expenditures                                  (27,713)    (18,334)
 Other investments                                     (990)       (280)
 Net cash used in investing activities         (28,703)    (18,614)
Financing Activities:
 Issuance of long-term debt                            25,000      —
 Maturity of first mortgage bonds                      (25,000)    —
 Issuance of short-term debt – net                     42,950      67,000
 Issuance of common stock                              761         1,253
 Dividends paid                                        (9,495)     (9,035)
 Other                                                 9,678       10,797
 Net cash provided by financing activities     43,894      70,015
Net Increase in Cash and Cash Equivalents               19,106      1,302
Cash and Cash Equivalents at Beginning of Period        27,457      43,277
Cash and Cash Equivalents at End of Period              $  46,563  $  44,579





NET ECONOMIC EARNINGS AND RECONCILIATION TO GAAP
THE LACLEDE GROUP, INC.
(Millions, except per share amounts)
                                     Gas                             Per Share
                        Gas Utility  Marketing  Other      Total     Amounts
                                                                     (2)
Quarter Ended December
31, 2012
 Net Income (Loss)      $  25.3    $  2.9   $  (2.6)  $  25.6  $  1.14
 (GAAP)
 Subtract: Unrealized
 gain (loss) on         —            (0.4)      —          (0.4)     (0.01)
 energy-related
 derivatives (1)
 Subtract:
 Acquisition,
 divestiture and        —            —          (2.2)      (2.2)     (0.10)
 restructuring
 activities (1)
 Net Economic Earnings  $  25.3     $   3.3  $  (0.4)  $  28.2  $  1.25
 (Non-GAAP)
 Diluted EPS (GAAP)     $  1.12     $  0.13   $ (0.11)  $  1.14
 Net Economic EPS       $  1.13     $  0.15   $ (0.03)  $  1.25
 (Non-GAAP) (2)
Quarter Ended December
31, 2011
 Net Income (GAAP)      $  21.1     $  3.7   $  0.4   $  25.2  $  1.12
 Subtract: Unrealized
 gain (loss) on         —            0.3        —          0.3       0.01
 energy-related
 derivatives (1)
 Net Economic Earnings  $  21.1     $  3.4   $  0.4   $  24.9  $  1.11
 (Non-GAAP)
 Diluted EPS (GAAP)     $  0.94     $  0.17   $  0.01   $  1.12
 Net Economic EPS       $  0.94     $  0.15   $ 0.02    $  1.11
 (Non-GAAP) (2)

(1) Amounts presented net of income taxes, which were calculated by applying
federal, state, and local income tax rates applicable to ordinary income to
the amounts of the pre-tax reconciling items. For the quarters ended December
31, 2012 and 2011, the total net income tax (benefit) expense included in the
reconciling items is $(1.6) million and $0.2 million, respectively.
(2) Consolidated net economic earnings per share (EPS) are calculated by
replacing consolidated net income (loss) with consolidated net economic
earnings (loss) in the GAAP diluted EPS calculation.
Note: EPS amounts by segment represent contributions to The Laclede Group's
consolidated EPS.







OPERATING CASH FLOWS AND RECONCILIATION TO GAAP
THE LACLEDE GROUP, INC.
(Millions)
                                                          Three Months Ended
                                                          December 31,
                                                          2012       2011
Operating Cash Flows (Non-GAAP)                           $  37.5   $  35.2
Add (deduct):
 Changes in assets and liabilities                  (36.2)     (93.2)
 Deferred income taxes and investment tax          2.6        7.9
credits
Net cash provided by (used in) operating activities       $  3.9   $ (50.1)
(GAAP)
Net cash used in investing activities (GAAP)              $ (28.7)  $ (18.6)
Net cash provided by financing activities (GAAP)          $  43.9   $  70.0





SOURCE The Laclede Group, Inc.

Website: http://www.thelacledegroup.com
Contact: Investor, Scott W. Dudley Jr., +1-314-342-0878,
sdudley@TheLacledeGroup.com, Media, Jessica B. Willingham, +1-314-342-3300,
jwillingham@TheLacledeGroup.com
 
Press spacebar to pause and continue. Press esc to stop.